OECD wants to raise international taxes, French government says that’s dumb

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The OECD’s proposal to allow national governments to tax a slice of multinationals’ profits on the basis of sales in their countries would hardly raise any additional revenues, according to an independent assessment for the French government.

A simulation performed by the French Council of Economic Analysis, which has the role of advising the French government, found that the change in corporate tax receipts would not be substantial for France, Germany, the US and China under the OECD’s proposals to rip up a century of international corporation tax rules. Meanwhile, it would create bureaucratic complexities, the study noted

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Mathieu Parenti, assistant professor of economics at the Université Libre de Bruxelles, said the limited results of the OECD’s proposals might make them “politically feasible because nothing changes”.

The big tax gains, he said comes from the other proposal for a global minimum tax, which is a “bit brutal” in getting “a big slice of the pie and decreasing the incentive for tax shifting” to low-tax countries such as Ireland, the Netherlands or Luxembourg. But the OECD would also have a harder time securing an international agreement for it.

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Not sure what the OECD is doing here. Every member of the OECD knows this would be a bad idea.... because then they’d be exposing their golden geese to the fox yard.